Wayne County Airport Authority, MI#s 2017A-C Senior Bonds Rated #A#; 2017A-C Subordinate Bonds Rated #A-#

Stocks and Financial Services Press Releases Tuesday September 12, 2017 09:15
CHICAGO--12 Sep--S&P Global Ratings

CHICAGO (S&P Global Ratings) Sept. 11, 2017--S&P Global Ratings assigned its 'A' long-term rating and underlying rating (SPUR) to Wayne County Airport Authority (WCAA), Mich.'s $105.1 million series 2017A-B senior-lien revenue bonds, and $94.3 series 2017C senior-lien refunding bonds issued for Detroit Metro Wayne County Airport (DTW).

At the same time, S&P Global Ratings assigned its 'A-' SPUR to the authority's $168.8 million series 2017A-C junior-lien refunding bonds. S&P Global Ratings also affirmed its 'A' long-term rating and SPUR on the authority's senior-lien bonds outstanding and its 'A-' SPUR on the authority's junior-lien bonds outstanding.

The outlook is stable. "The ratings reflect our view of the airport's market position and importance to the Delta Air Lines Inc. system," said S&P Global Ratings credit analyst Kevin Archer. More specifically, the ratings reflect our opinion of: A large 10-county service area, with a population of more than 5 million that provides a good base for local air travel demand; The airport's position as an important domestic hub and international Asian gateway in Delta's system; and Limited competition from other airports.

In our view, the following factors partially offset these credit strengths: Concentration in Delta and its affiliates and a moderately high exposure to connecting traffic; and Adequate debt service coverage, as calculated by S&P Global Ratings, and a relatively weak liquidity positions as a result of the airport's fully residual nature and bond provisions that allow passenger facility charges (PFCs), available cash, other fund deposits, and federal grants to be included in the rate covenant calculation and additional bonds test Bond proceeds will be used to finance airfield reconstruction project as part of WCAA's capital improvement programs as well as to refund outstanding debt for estimated interest savings.

The stable outlook reflects our expectation that demand will remain stable or grow modestly and that S&P Global Ratings-adjusted DSC will stay near 1x; and liquidity will remain adequate, despite the airport's additional debt plans. We could lower the rating within the two-year outlook period if our adjusted DSC calculations are consistently below 1x or DTW's liquidity position materially erodes.

We don't expect to raise the rating within the two-year outlook period, given the airport's additional debt needs. A higher rating could result beyond then if DTW's demand increases notably and we believe it is sustainable, while maintaining adequate DSC at 1x or higher and adequate liquidity.

Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at www.standardandpoors.com for further information.

Complete ratings information is available to subscribers of RatingsDirect at www.globalcreditportal.com and atwww.spcapitaliq.com.
All ratings affected by this rating action can be found on the S&P Global Ratings' public website at www.standardandpoors.com. Use the Ratings search box located in the left column.

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